Anwar et al v. Fairfield Greenwich Limited et al

Filing 1052

DECISION AND ORDER granting as modified #775 Motion to Certify Class, for the reasons set forth above. (Signed by Judge Victor Marrero on 2/22/2013) (cd)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

I

.

------------------------------X
PASHA S. ANWAR, et al.,
Plaintiffs,

-againstFAIRFIELD GREENWICH LIMITED,
et al.,
DECISION AND ORDER
Defendants.
----------------------------- X
VICTOR MARRERO, United States District Judge.

Lead plaintiffs AXA Private Management,
Health

Medical

Insurance
Trust,
Bahrain,

Center

Company

Natalia

Ltd.,

Martin

Retirement
and

&

Trust,

Bypass

St.

"Plaintiffs"),

Trust,

Shirley

Securities

Hatgis,

Dawson

(collectively,

Employees

Pacific West

and

Harel

Bach

Family

Investment

Company

Stephen's

School

brought this class action on

behalf of individuals and entities who invested large sums
of money in four investment funds
operated by

the

overwhelming

majority

invested by
Madoff

FGG

("Madoff")

(the "Funds") created and

Fairfield Greenwich

in

of

the

Plaintiffs'
Ponzi

scheme

Group
money

("FGG" ) .
was

Inc.

was sentenced to 150 years

("BLMIS"),

in

turn

operated by Bernard

under the auspices of Bernard L.

Investment Securities,

The

Madoff

and for which Madoff

in prison following his guilty

-1­

See

plea.

united

States

v.

Madoff,

a

number

No.

Cr.

09

0213

(S.D.N.Y. June 29, 2009).
Plaintiffs
executives,

and

suing

are
other

administered,

(the

filed

September

violations of federal
of

against

"

contract

FGG and

and

(collectively,

quasi contract

LLC

Plaintiffs

allegations

two

"PWC"),3

("GlobeOp" )
are

causes

and

several

"Citco") , 2

Services,

Plaintiffs

allege

law and common law tort,

associated entities

(collectively,

custodians

2009,

securities

Defendants") , 1

rfield

entities

29,

as

who
the

"SCAC") ,

served

providers

In the Second Consolidated Amended Complaint

Funds.

or

service

entities,

of

audited,

breach

professional

FGG

of

of

action

individuals
Citco

(the

entities

PricewaterhouseCoopers
and

GlobeOp

(collectively,
detailed

Court's prior opinions in this action,

more

Financial

"Defendants") .
fully

Anwar v.

in

this

Fairfield

In addition to FGG, these entities and individuals include Fairfield
Greenwich Advisors LCC ("FGA"), Fairfield Greenwich Ltd. ("FGL"), and
three wholly-owned FGL subsidiaries: Fairfield Greenwich (Bermuda) Ltd.
("FGBL"), Fairfield Risk Services Ltd.
("FRS"), Fairfield Heathcliff
Capital LCC ("FHC"), Walter M. Noel Jr.
("Noel"), Jeffrey H. Tucker
("Tucker"),
Andres
Piedrahita
("Piedrahita"),
Amit
Vijayvergiya
("Vij ayvergiya"),
Daniel
E.
Lipton
("Lipton"),
and
Mark McKeefry
( "McKeefry") .
Citco is defined to include defendants Citco Group Ltd.
("Citco
Group"), Citco Fund Services (Europe) B.V.
("CFSE"), Citco (Canada)
Inc.
( "CCI" l, Ci tco Global Custody N. V . ( "Ci tco Global
Ci tco Bank
Nederland N. V. Dublin Branch ( "Ci tco Bank,"), and Ci tco Fund Services
(Bermuda) Ltd. ( "CFSB") .
U

),

Plaintiffs' surv~v~ng claims are against PricewaterhouseCoopers LLC
("PwC Canada"), and PricewaterhouseCoopers Accountants Netherlands N.V.
("PwC Netherlands") .

2

Greenwich Ltd., 728 F. Supp. 2d 354
I")

and Anwar v.

372

(S. D . N . Y. 2010)

Plaintiffs

(S.D.N.Y. 2010)

Fairfield Greenwich Ltd.,

("Anwar

728 F. Supp.

2d

( "Anwar I I" ) .

now

move,

pursuant

Federal Rule of Civil Procedure 23

to

Rule

23

("Rule 23"),

of

the

to certi

a class (the "Class" or "Proposed Class") comprised of:
all shareholders/limited partners in Fairfield Sentry
Limited, Fairf Id Sigma Limited, Greenwich Sentry,
L.P. and Greenwich Sentry Partners, L.P. (the "Funds")
as of December 10, 2008 who suffered a net loss of
principal invested in the Funds.
, Mem. of Law
Mem.") at 1.)4

Supp. of Mot. for Class Cert.

("PIs.'

For the reasons discussed below, Plaintiffs'

proposed class def

tion is modified to exclude members of

Proposed Class whose investments in the Funds were made
the

following

Luxembourg,

Switzerland,

Israel,

Kuwait,

Korea,

Mongolia,

Tokelau,
Taiwan,

countries:

China,

Liechtenstein,

United Arab Emirates,

Andorra,

San Marino,

of

the

Japan,

Saudi Arabia,

Monaco,

Oman,
Bosnia,

the "Excluded Countries·).

The Court

Proposed

all

Picairn,

and South

finds

satisfies

Korea,

Germany,

ly,

the

Qatar,

Namibia,

Africa (collect
that

North

France,

Class,

requirements

modified
of

Rule

as

indicated,

23 (a)

and

the

Excluded from the Class definition are the Defendants, and any entity
in which the Defendants have a controlling interest, and the officers,
directors, affiliates, legal representatives, immediate family members,
heirs, successors, subsidiaries, and/or assigns of any such individual
or entity.

4

3­

pertinent

requirements

subject

to

further

of

23(b)

Rule

s

Class

is

or

decertification

as

adjustment

warranted as facts develop.
I. BACKGROUNDs

The SCAC alleges a common course of wrongful conduct
by the

ield Defendants

characterized by a

continuous

series of false representations and material omissions that
began from the

founding of

the Funds

1990 to Madoff' s
Specifi

confession of wrongdoing in December 2008.

ly,

Plaintiffs claim that uniform marketing materials and the
periodic

updates

represented

about
that

(1 )

actually inves
conversion"

the

strategy;

(2)

due

Madoff's operations

and,

of

Madoff's

contains

myriad

omissions,
strike

that

diligence,
as

a

examples

(SCAC

of

and

these

(3)

it-strike

that

had full
~

182.)

FGG had
monitored

access
The

(id.

~

184),

investment

which

never

information

showing

to

SCAC

misrepresentations

including the alleged investment via a
an

were

strategy resulted

continually

result,

falsely

investments

Madoff's

returns;

operations.

conversion,"

occurred,

performance

Plaintiffs'

consistent

extensive

all

Funds'

by Madoff in the so called "

substant
performed

the

or

"splitactually

"substantial,

A more detailed description of the facts of this case is provided in
Anwar I and Anwar II.
Unless otherwise indicated, all facts in the
Background section are taken from these opinions, and the documents on
which they relied.

4

consistent annualized rates of return for the Funds,"
~

187),

(id.

and that FGG was simply recycling information that

Madoff had provided and did nothing to independently verify
whether investments occurred or whether the returns Madoff
reported were accurate,

~

(id.

see also

189i

Plaintiffs

further

id.

allege

~~

184­

that

FGG

made these misstatements or omissions despite numerous "red
flags"

that should have put FGG on notice that Madoff was

not being honest.
The
GlobeOp

SCAC also
related

brings

to

the

allegedly provided to FGG.
that

the

auditor,
wholly

Funds'
PwC,

failed

claims

against

services

to

to

fulfill

that

Citco

conduct
their

any

duties,

PwC,

and

entities

these

Specifically,

administrators,

failed

Ci tco,

Plaintiffs claim
and

GlopeOp,
diligence

due

and
and

thereby

assisting

the Funds in their fraud and breaches of fiduciary duties,
and ultimately allowing Madoff to abscond with Plaintiffs'
money.
Defendants
orders,

as

moved

detailed

to

dismiss

in Anwar

I

the

and

SCAC

Anwar

II,

denied in part and granted in part Defendants'
dismiss, familiarity with which is assumed.

II.

DISCUSSION

-5­

and

in

the

two
Court

motions to

A. STANDARD OF REVIEW

To certify the Proposed Class,

Plaintiffs must satisfy

all four of the requirements of Rule 23(a) and the relevant
portions of Rule
Sec.

.,

Lit

( "Liven til)
To

See

23 (b) (3) .
F.R.D.

210

In re

512,

Livent Noteholders
(S.D.N.Y.

514

2002)

•

meet

Rule

23 (a) , s

prerequisites,

Plaintiffs

must

demonstrate that:
(1) the class is so numerous that joinder of all
members is impracticable; (2) there are quest
of
law or fact common to the class i (3) the claims or
defenses of the representative parties are typical of
the claims or defenses of the class; and (4)
representative parties will fairly and adequately
protect the interests of the class.
Rule 23(b) (3)

Fed. R. civ. P. 23(a).

further requires that

Plaintiffs demonstrate that common questions of law or fact
"predominate
members"

over

any

questions

and that maintaining a

affecting

individual

class action "is supe

to other available methods" of adjudication.

Fed.

R.

civ.

P. 23 (b) (3) .
Trial
determining
"'the

courts

are

whether

district

court

to

given
grant
is

substantial
class

often

discretion

certification
the

best

assess the propriety of the class and has the
to

alter

decertify

or

modify

the

class

the

class,

whenever

6­

create

warranted.'"

in

because

position

to

lity .

subclasses,

and

Charter

s

Fl

(E.D.N.Y.2006)
F.3d 134,

139

a

233

(2d Cir.

2001)

("Sumitomo III")

liberal

this

markets,
class

interpretation

that

involve

of

Rule

alleged

85,

See

88-89

In

re

(S.D.N.Y.

("Sumitomo

of

to

public

.,

Sumitomo
("Sumitomo I");

II").

As

the

Second

for

it

is

developments
II

481

Circuit

182

see also
(S.D.N.Y.
stated

in

. , "'if there is to be an error made, let

it be in favor and not against

require. '

order

in cases such

., 194 F.R.D. 480,

Green v. Wolf

later

in

manipulation

1998)

In re Sumitomo

action,

courts to

23

------------------~~--------~

2000)

262

to maximize the benefits to the public provided by

actions.

F.R.D.

301

(alteration

Second Circuit has direc

maximize the benefits to private parties and,
as

297,

F.R.D.

(quoting In re Sumitomo Copper Litig.,

original) } .
adopt

.,

Contract

406

always

subj ect

during

F.2d

maintenance of

the

291,

298

to

modif

course
(2d

of

Cir.

class

ion
the

should

trial

1968)

so

(quoting

in v. Hirshi, 402 F.2d 94, 99 (lOth Cir. 1968)}.
B.

RULE 23(a) REQUIREMENTS
1. Numer<?si ty
To meet the requirements of Rule 23(a) (1),

must

be

so

large

impracticable"
II,

that

(the

194 F.R.D at 482

joinder

"Numerosity
(cit
--

......

_""­

of

all

members

Requirement").

"the class
would

be

Sumitomo

In re Drexel Burnham Lambert

-7­

Inc.,

-'---­

-~ ....

precise

960

F.2d 285,

calculation

members

not

1S

of

290

(2d Cir.

Although

1992)).

number

the

Second Circuit has

required,

of

class

the

potent

observed

that "numerosity is presumed at a level of 40 members."
re Vivendi universal
(S.D.N.Y.

F.3d

47

Sec.

. , 242 F.R.D. 76, 83

Lit

(cit " " ­ Consolo
---

2007)

Park,

S.A.

In

473,

U. S. 1122 (1995))

483

(2d Cir.1995),

cert.

(quotation marks omitted)

During the Proposed Class Period,

denied,

515

( "Vivendi") .

approximately 1,000

members of the Proposed Class maintained accounts with the
Defendants

and

therefore

Numerosity Requirement.
Commonal

2.

Rule 23 (a) (2)

Plaintiffs

clearly

of Law or Fact

tions

requires plaintiffs to demonstrate that

"Commonality Requirement"),

In

re

Sec.

Lit

s members

(the

which has been characterized as

See Sumitomo II,

Prudent

the

(See Pls.' Mem. 3,)

common issues of law or fact affect all c

a "low hurdle."

meet

.,

194 F.R.D at 482
163

F.R.D.

200,

(citing
206

n.8

(S.D.N.Y. 1995))
It

is evident

exist

in

this

class

members

common questions

proceeding.
have

misrepresentations
Requirement

that

been
and

is satisfied.

Where

omissions,

8

law and fact

plaintiffs

injured

See,

of

by

allege

similar

that

material

the

Commonality

Vivendi,

242 F.R.D.

at 84.
a

The claims of

common

course

of

conduct

specifically allege
the

Defendants

e from

Proposed Class clearly
by Defendants

and

P

fs

certain actions and statements by

led

to

the

concealment

of

Madoff IS

scheme and were misleading with respect to mate
Furthermore,
are

Ponzi
facts.

there are numerous issues of law and fact that

common to

Proposed Class

Defendants

were

compl

Defendants

omitted

it

or

including whether:

Madoff/s

misrepresented

Defendants

knew

or

statements

were

false

breached dut

in

I

recklessly
or

Ponzi

(1)

scheme;

(2)

mate

(3 )

disregarded

misleading;

that

Defendants

(4 )

s owed to the Plaintiffs; and

these

Plaintiffs

( 5)

suffered damages and the extent and appropriate measure of
damages.
AccordinglYI because Plaintiffs all
of

fraudulent

conduct

I

the

Commonal

a common course
Requirement

is

satisfied.
3.

Rule

23(a} (3)

typical of the class
23 (a) (3)

requires

that

(the "Typical

claims

l

Requirement

fl

)

•

be

"Rule

is satisfied when each class member's claim arises

from the same course of events
similar

Plaintiffs

legal

arguments

l

to

9

and each class member makes
prove

the

defendant's

liability.

Sumitomo

/I

182

I!

F.R.D.

at

(internal

94

quotation marks and citation omitted) .
Here!
evidence

Plaintiffs
to

prove

nature

and

with

industry

allege

that

extent

of

that

they

Defendants

their

due

will

use

common

"misrepresented

diligence

and

compliance

performed

if

standards!

the

as

represented!

would have prevented the loss of billions of

dollars

the

to

ll

(PIs.!

Class.

Mem.

Furthermore!

6.)

Plaintiffs argue that individual members of the Class will
not

be

the

subj ect

Funds

to unique

were

made

defenses

only

because

through

investments

private

in

placement

transactions! and nearly all the information related to the
investments came from the Defendants.
Accordingly!
that

the

Plaintiffs have sufficiently demonstrated

potential

class

members!

claims

satisfy

the

Typicality Requirement of Rule 23{a) (3).
4.

A~equacy

Rule 23(a) (4)
parties will
of the class
P.

"fairly and adequately protect the
ll

23(a)(4).

plaintiffs!

requires that the representative of the

(the
To

counsel

"Adequacy Requirement
this

meet
must

be

ll
).

Fed.

requirement!

"qualified!

interests
R.

the

experienced!

Civ.
lead
and

generally able to conduct the proposed litigation!" and the
class

representatives must

not

-10­

have

interests

conflicting

with

the

class.

citations

Livent,

210

and quotation marks

F.R.D.

at

omitted).

517
The

(internal

Court

finds

that both requirements are satisfied in the instant matter.
Plaintiffs'

attorneys

have

vigorously

pursued

these

claims to date and have adequately represented classes in
other

securities

litigation

act

Therefore,

qualified

for

counsel

the

Additionally,

no

and

other

for

purposes
conflicts

complex

the

Plaintiffs

of
of

class

23(a)(4).

Rule

interest

are

between

the

Plaintiffs and members of the Class have been raised by any
of the parties here.
Accordingly,
satisf
D.

the

Court

finds

that

Plaintiffs

have

the Adequacy Requirement of Rule 23(a) (4).

RULE 23(b) (3) REQUIREMENTS
In addit

to satisfying Rule 23(a),

Plaintiffs must

also establish that this action is maintainable as a class
action under Rule
Proposed

Class

that

action

an

pursuant
is

"questions

of

predominate

over

members"
class
fairly

Plaintiffs
to

Rule

or

any

fact

is

and eff

superior

to

as

to

Requirement
other

which provides

class

affecting

ly adjudicating

-11

a

common

questions

"Predominance

seek to certify

23 (b) (3),

maintainable

law

(the

action

23 (b) .

class
only

ll

),

available
the

act

if
members

individual

and

"that

a

methods

controversy"

(the

"Superiority Requirement").

Fed. R.

class certified under Rule

23 (b) (3)

to

as

an

'opt-out'

class

because

Civ.
is

P.

"A

23(b) (3).

sometimes referred

Rule

23 (c) (2)

mandates

that members of a class certified pursuant to Rule 23(b) (3)
be

afforded

that class."
certify

the

domestic

the

opportunity

Vivendi,
Proposed

to

'request

any

from

Should the Court

242 F.R.D. at 90.
Class,

exclusion'

foreign

investor

or

who does not opt out of the class "is bound by

the final disposition

the case."

1.

PredoJ"tlinance~'::l~rement:

The

Predominance

Id.

Requirement

is

a

more

demanding

standard than the Commonality Requirement and is satisfied
if

the

"resolution

questions
genuine
proof,

that

of

some

of

qualify

each

class

controversy

can

be

the

achieved

legal

member's
through

or

factual

case

as

generali

and if these particular issues are more substantial

than the issues subject only to individualized proof."
cit
Cir.

a

Moore v. PaineWebber
2002)).

Inc.,

306 F.3d 1247, 1252

Id.
(2d

The Predominance Requirement is "readily met

in certain cases alleging .

securities fraud."

Amchem

Prods., Inc:v. Windsor, 521 U.S. 591, 625 (1997).
Defendants argue that the proposed Class should not be
certified because individual issues of reliance foreclose a
finding

of

predominance.

Specifical

-12

Defendants

claim,

among

other

things,

that

Plaintiffs

certain non-uniform materials not

uniformly

otherwise.

rely

on

or,

certain

Defendants

allegedly

relied

on the flip-side,
materials,

further

lege

to

and

never

"made"

in

any

event,

the

Defendants

these representations.

reliance

can

be

circumstantial evidence and that,
relied

on

Defendants i

core
(2)

based

actually

can

be

and

Plaintiffs

omissions

shown because

(1)

common,

on

at the least,

misrepresentations
reliance

information,

Plaintiffs counter that

demonstrated

or

Plaintiffs

varied in their sophistication and access
that,

did

uniform

that

on

the

by

fraud

created a market that would never otherwise have existed;
and

(3)

the

applies

to

concludes
theory

sumption of
Defendants'

that,

or

reliance

material

even absent
Affiliated

a

under Affiliated Ute

omissions.

The

"fraud created the

Ute

common questions of law and fact

presumption

of

Court
market"

reliance,

clearly predominate over

any individual issues.
As

this

Court

noted

under

similar

circumstances

another case, even assuming Defendants' c

that certain

"communicat

to class members may not have been uniform,

they al

were uni

are

therefore

certification."

immaterial

misleading.
and

will

not

The variations
defeat

class

Bresson v. Thomson McKinnon Sec. Inc.,

-13­

118

F.R.D.

339,

stment

343
agents

individual

by

are deemed to

[be]

.,

Lit

Plaintiffs

reliance

because

that

also

F.

third party
does

foreclose

"misrepresentations
made

745

use

1988).

the

issues of

predominance

Assocs.

(S.D.N.Y.

made

2d 386,

was little to no publically available
investments,

Madoff

relating

to

the

Funds,

agents,

Plaintiffs'

and

create

finding of
to

an

agent

In re Beacon

(S.D.N.Y.

408

This conclusion is only buttressed by the

to

a

to the principal."
Supp.

not

fact

2010).

that there

information relating

therefore

any

whether provided

to

information

Plaintiffs

was

likely

extent

the

through

the

obtained

the

or

Defendants.
Furthermore,
arguments

in

the merits
the

to

opposition

of

the

predominance

to

class

certification

dispute and do not
inquiry or other

Defendants'

other

relate

to

directly pertain to

Rule

23

requirements

such as whether Defendants can be deemed to have "made" any
of

the

statements

[the]

part

case,

[the Court]

the

essentials

Metro.
("In
the

s'

Life

the

extensive

Ins.

relevant
briefing

circumscribe [s]

for

considering
district

in

class

Co.,
the

court

is

182

of

the

[its]

"despite

merits

of

the

sent inquiry to

certification."
F.R.D.

72,

certificat
not,

materials

at

-14­

of
this

76
a

(S.D.N.Y.
potential

stage,

to

1998)
class,

assess

the

merits or the substance of the claims at issue but, rather,
is

to

its

inquiry

under

[Rule

limit

requirements
Jacquelin,

U.S.

417

propriety of

a

to

the

Eisen

23] .1/)

156,

178

class act

satisfaction

the

Carlisle

("In determining

(1974)

the

v.

of

&

the

question is not whether

the plaintiff or plaintiffs have stated a cause of action
or

will

prevail

on

the

merits,

but

requirements of Rule 23 are met."
and citations omitted)).6
based

arguments

establishment
Plaintiffs,

whether

the

(internal quotation marks

To the extent any of the merits-

presented

of

rather

by

sub-classes

Defendants are

De
or

free

s
the

necessitate

severance

to propose

the

of

these

some

remedies

at the appropriate time.
The

Court

concludes

that

quest

of

law

and

fact

common to the Proposed Class predominate over any questions
affecting

only

individual

se out of Defendants'
was

directed

all

a

at

series

all
of

members.

alleged fraudulent conduct,

investors.
false

by Defendants,

iffs'

and

Plaintiffs
misleading

claims
which

have

statements

also
and

in violation of federal securities

As the Supreme Court has recently emphasized, the "
s"
under Rule 23 necessarily "entail [sl some
merits of the plaintiff's underlying claim."
Wal Mart Stores
Dukes,
131 S. Ct.
2541,
2551
(2011).
The Court has
considered all of the Rule 23 requirements and the merits of the case,
where
, in reaching the conclusion that Plaintiffs
Class satisfies Rule 23's stringent requirements.
Under similar
circumstances, other courts in this district have reached the same
conclusion.
See, e.g., In~.o::..~eac~!l, 282 F.R.D. 315.
-15­

laws,

which Plaintiffs assert affected all investors.
issues

criti

for

establishing

lity

1
a

include whether Defendants engaged

in

The

this

fraudulent

case

scheme

and made the false and misleading statements and omissions,
whether

those

whether

Defendants

iffs

will

establishing
thus,

each

common

See,

of

sues

with

the

were

scienter,

on

similar

foregoing

predominate
282

F. R. D.

whether
Class.

the
evidence

issues

over

material,

and

of

members

rely

In re Beacon,

Affiliated Ute

omissions

injured
ly

1

and

acted

conduct

Defendants'
P

statements

at

t

and

individual

at

when

328 - 331

issues.
(applying

sumption of reliance to certify class of

investors in funds that invested assets with Madoff) .
Accordingly,

Plaintiffs

Predominance
2.

When

Su:e~r__

efficiently
23(b)(3).
balance,

i ty

fied

the

Requir~11'lent

certifying a

"superior

sat

rement.

Rule 23(b) (3),
is

have

proposed

class

in

accordance

with

courts must consider whether a class action
to

other

lable

methods

udicating the controversy."
The

Superiority

terms

advantages of a

of

Requirement

fairness

and

for

fairly

and

Fed. R. Civ. P.
asks

courts

efficiency,

to
the

class action against those of alternat

available methods of adjudication.

16­

See Fed. R.

Civ.

P.

23

Advisory Committee Notes,

1966 Amendment,

23,

(b) (3)

at 385

which

a

effort,
to

("Subdivision

class

action

and expense,

persons

procedural

would

fairness
Rule

encompasses those cases in

achieve

or

situated,
bringing

23 (b) (3)

to

efficient

other

economies

without

about

identif

consider in determining whe
"superior

Rule

of

time,

and promote uniformity of decision as

similarly

results.").

28 U.S.C.A.

a

available

s

sacrificing

other
several

undesirable
factors

to

class action is in fact

methods

for

for

fairly

and

adjudicating the controversy":

(A)
the class members'
interests in individually
controlling the prosecution or defense of separate
actionsj (B) the extent and nature
any litigation
concerning
controversy already begun by or against
class members j (C) the desirability or undesirability
of concentrating the litigation of the claims in the
particular forumj and (D) the difficulties in managing
a class action.
Fed. R. Civ. P. 23(b) (3)
Courts

may

properly

consider

res

judicata

concerns

when evaluating the superiority Requirement with respect to
a proposed class that includes foreign class members.
Vivendi,

242

concerns

F.R.D.

have

superiority

at

been

inqui

95

(stating

appropriately
II

but

that

that

"res

grafted
the

res

See

judicata
onto

the

judicata

determination should not be "dispositive without either an
evaluation

of

the

likelihood

-17

of

nonrecognition

or

a

consideration of other factors which impact a determination
of

foreign
s

should

investors

and

that

Defendants assert

requirement") .

the superiori

a

be

excluded

United

States

from

class

the

action

that

proposed
is

not

a

superior method for adjudicating Plaintiffs'

claims because

a

clusive effect

by

resulting judgment would not be given
the

courts

in

Plaintiffs

which

the

approximately

reside

seventy

(collectively,

countries
the

in

"Foreign

Courts")
a.

Standard

As

this

standard

Court has

for

stated previous

evaluating

the

the appropriate

likelihood

of

the

Foreign

Courts' recognition of a judgment rendered by this Court is
whether

"

preclusive

Foreign
any

judgment

"Probability Standard n
F.R.D.

266,

282

Courts

)."

(S.D.N.Y.

would

rendered

probably
by

this

recognize
Court

as
(the

In re Alstom SA Sec. Litig., 253
2008).

Under

the

Probability

Standard,
PIa
iffs carry the burden of demonstrating that
"foreign court recognition is more likely than not,
but if Plaintiffs are "unable to show that foreign
court recognition is more likely than not, this factor
weighs against a finding of superiority and, taken in
consideration with other factors, may lead to the
exclusion of fore
claimants from the class."
11

The
Class included members from
countries which Plaintiffs have placed into
of Sashi Bach Boruchow, dated Mar. 2, 2011
The Court will therefore
them within

-l8­

a large number of foreign
eight groups.
See Decl.
("Boruchow Declo") Ex. 2.)
these groups.

Id.

(quotiI1.9 Vivendi,

under
the

the

242

Probability

risk

F.R.D.

Standard,

nonrecognition

of

determining whether,

along

at

Courts
along

should

with other

'" evaluate
in

factors,

plaintiffs

Vivendi,

242

In re Initial Pub. Off

Sec. Lit

F.R.D.
., 471

~----------------------~------~~--~----~~

F.3d 24,
courts

33

(2d Cir.2006)).

'may

consider

any

"When determining foreign law,

relevant

material

including determinations by other courts,
United

States

courts

have

classes

which

included

[c

and

even

continuum, ,,,

a

sa tisfy the Superiority Requirement.
at 95

However,

95).

class

members,

is

lly

or

source,'

and the fact that

certified

foreign]

proposed

lead

iffs

Alstom,

particularly persuasive."

253 F.R.D. at 291 (quoting Fed. R. civ. P. 44.1).

The
duel

Court
expert

is

current

reports

from

scholars debating the 1
a

United States opt out

contentious

issue

presented
preeminent

with

extensive

practi t

and

ihood of foreign recognition of
class action judgment.

debated

by

these

esteemed

The most
scholars

is

whether recognition of the judgment would violate a foreign
country's
j

public

sdictions

that

policy.
have

Undoubtedly,
affirmatively

in

certain

considered

the

efficiency and fairness concerns implicated by class action
procedures,

this discussion has substantive

19­

t

and will

determine

likely

recognition to a
vast

majority

whether

foreign

a

court

countries

that

have

grant

However,

judgment by this Court.

of

will

not

yet

in the
squarely

confronted the issue of class actions, much

ss explic

addressed

class

recognition

judgment, the reams
the parties,

of

a

United

than

provides
another,

action

esoteric legal analysis submitted by

citing as legal authority Baron Blackburn8 and

his young-blooded contemporaries,
more

States

ly

high-priced
little

arm-chair

assistance

to

in analyzing the 1

ultimately amount
oracles,
the

to no

conjecture

Court,

one

that

way

or

lihood of foreign recognition

of this Court's judgment.
Therefore,
suffic

ly

foreign

demonstrates

country

judgments,
that

the Court concludes that, where a plaintiff

is

to

that

the

recognize

stated
and

policy

enforce

of

a

foreign

or that its law is generally inclined to favor

course

of

action,

such

rebuttable presumption that,

a

showing

would

create

a

absent an affirmative showing

Baron Blackburn was an eminent eighteenth century British judge and
Lord of Appeal in Ordinary responsible for a number of influential
contract law decisions.
However, like most of the authorities cited by
the parties, Baron Blackburn's opinion makes absolutely no mention of
class action litigation, which is unsurprising considering the absence
of class action litigation in the United Kingdom during the relevant
time period.
While the concept of "group litigation" may have
originated in medieval England,
it had apparently "disappeared in
England by the middle of the nineteenth century."
Robert G. Bone,
and
Forms, 70 B.U. L.
213/ 223
Stephen
From
ion to
the
Class Action
In
legal
authorities cited by the
reference to
has yet to appear.
I

-20­

to the contrary,

s action litigation, does not violate

c

judgment, even
a

Such a presumption is

foreign country's public policy.

especially
Foreign

warranted

Courts

United States

recognition of a parti

do

in

not

situations
routinely

the

address

substantive or procedural issues cons
the

united States

court

had

the

to

occasion

particular

judgment,

find

therefore

embrace,

ion of procedure or

certification of the Proposed Class,
clear and convincing evidence

underlying

and embodied in

and

explicitly

the

relevant

or

have

not

reject,

tance.

a

Following

should the Defendants
that

enforcement of

class-action judgment rendered

this litigation would

fact violate the public policy

a

any of the countries

residence
calling

of

the

members

of

a

certified

class,

thereby

question the likelihood of enforcement of this

Court's judgment by the courts of that foreign country,
Defendants may

introduce

such evidence

and move

to

the

sever

those members from the class at that time.
a.

1:

Under

Dutch

Netherlands and Curacao
law,

a

foreign

judgment

will

not

be

recognized unless the foreign court based its jurisdiction
on an "internationally acknowledged ground,u that satisfied
domestic due process requirements,
publ

policy.

(Declo

of Prof.

-21­

and comports with Dutch
Hans Smit,

Mar.

1,

2011

~

28

("Smit

Curacao

Decl.").)

legal

system

is

copied from the Netherlands and therefore any analysis of

the

a

likelihood

Dutch

court

tant

the

recognize
~~

(Smit Decl.

applies equally to Curacao.
In

to

matter,

Plaintiffs

judgment

71-72.)

have

sufficient

demonstrated that a Dutch court would more likely than not
recognize a
25,

2007 Amsterdam Court

Bank Nederland N.V.,
of

Appeals,

Damages

Jan.

Act

authorities'
and

The January

judgment rendered by this Court.

(the

Appeals decision In re Dexia

rekestnummer 1783/05

25,

2007)

"Damages

("Dexia")
Act")

(Amsterdam Court

regarding

the

"demonstrates

the

Mass
Dutch

willingness to adopt opt-out class mechanisms"

"the Dutch courts'

I

lihood for

recognizing opt-out

mechanisms as generally consistent with Dutch treat
constitut

principles."

Alstom,
---_.

253 F.R.D.

After examining the expert declarat
parties'

arguments

concludes

that

concerning

Plaintiffs

have

sand

at 289 90.

and considering the

Dutch
suff

law,
iently

the

Court

demonstrated

that Dutch courts - and therefore those of Curacao as well
would
preclus
this

more likely than not recognize,

enforce,

and give

effect to any judgment in this case rendered by
Court

Accordingly,

involving

absent

the Court will certi

-22­

Dutch

class

members.

a class which includes

class

members

from

both

the

Netherlands

and

Curacao

with

claims against Defendants.
b.

Group 2: Uni ted
Jurisdictions

"There

is

no

clear

judicata effect of a
in

England,

Vivendi,

242

Jonathan

Harris,

Decl.

If)

•

gene
that

issued the

will

regard

competent

satisf

addressing

issue

of

English

also

(Decl.

Feb.

26,

2011

~

foreign

27.)

connection

if

the

court
defendant

with

at

the

the

jurisdiction,·

to proceedings
limited to,

( "Harris

courts

British

will
court

had

[corporate

If

"courts

jurisdictionally

as

foreign

expense from which it has carried out
the overseas

law.
Prof.

foreign

the

state,

if a corporate defendant maintains a

business

of

15)

British

specifically,

overseas
the

res

"j urisdictionally competent.

More

if

law,

judgment

judgment was

the

the

common

see

common

Law

class action judgment

102i

English

either

torial

an

Common

dated

~

Decl.

authority

and

at

ly enforce a

(Harris

of

is

F.R.D.

Under

)

Canada

[United States]

which

If

Kingdom,

requisite
which

If

is

"fixed place

defendant's]

own

its own business in

or "if the defendant submitted

in that state,·

which includes,

"voluntarily pleading to

27, 29-33.)

23­

but

the merits.

If

is not
(Id.

~~

The

English

common

law

jurisdict

of

the

defendant
~~

(See id.

plaintiff.
meets

basic

enforcement,

the
"that

defenses

and
If

34 38.)

the

adjudging

court

not

the

those

the

the foreign

judgment

recognition

for

requirements

British

for

ign courts focuses on the

competence of

circumstances

framework

will

likely

judgment

fore

and

cons

is

in

two

breach

of

natural justice" or that "it is contrary to English public
policy."

(Id.

frequently

~

look

to

other common law countries

Courts

39.)

the

law

guidance on the recogni t

of

of

the

United

Kingdom

foreign judgments,

for

and the

law of those countries is either substantially similar to,
or even more favorable than,
regarding

the

judgments.

(See id.

enforcement

To consider a
justice,

the law of the

~~

of

foreign

ted Kingdom
s

action

breach of

natural

c

177 199.)

particular action a

the British courts again focus on the defendant,

determining whether

the

defendant

had

the

opportunity

to

adequately defend itself by having "been served with proper
notice of the proceedings, been allowed properly to arrange
defence,
must

have

and

the procedures of the foreign court

been acceptable.

If

(Id.

~

40.)

British courts

rarely refuse to recognize in personam foreign judgments as
contrary to English public policy, and although there is no

-24

formal analytical framework for determining a violation of
English public policy,

'" [t]he usual colourful examples are

an order to pay damages for breach of a contract to kidnap
or

to

laws.

sell

'ff

narcotics,
~~

(rd.

sdiction

43, 88

and

or

those

based

on

openly

racist

(quoting Adrian Briggs et al., Civil

Judgments

(5th

557

2009)).)

ed.

Defendants have submitted no credible evidence that British
courts would consider a class-action judgment to be either
a breach of natural

justice or contrary to British public

policy.
After

examining

considering

the

the parties'

declarations

arguments

and

concerning English law

and other common law jurisdictions, the Court re adopts the
rationale set forth in Alstom and concludes that Plaintiffs
have

suffic

United

ly

Kingdom,

would more

I

demonstrated

Canada,
ly

and

than

not

that

other

the

courts

common

law

recognize,

enforce,

of

the

countries
and

give

preclusive effect to any judgment rendered in this case by
this

Court

involving

jurisdictions.
conc I uded

that

absent

class

Furthermore,

this

both

the

ted

members
Court

Kingdom

and

from
has

these
already

Canada

would

more likely than not recognize a United States class action
judgment and bar absent class members from bringing later
actions

the defendants.

-25­

Alstom,

253 F.R.D. at 289;

Vivendi,

242

F.R.D.

at

Accordingly,

103.

the

Court will

certify a class which includes British, Canadian, and other
common law country class members.
3: Switzerland

c.

Under Swiss law, a foreign judgment will be recognized
in Switzerland if
according
finali

(1)

to Swiss

and

(3)

the

foreign

court
(2)

legal princ

there

is

has

no ground to

such as a violation of public policy,

jurisdiction

the

refuse

decision

recognition,

under Art.

Swiss Private International Law Act

~

27 of the

("SPILA").

Phillipp Kanzig,
Decl.

of

("Romy

Prof.

dated Mar.

I,

2011

Isabelle Romy,

Decl.I/).)

29

expert

(Decl.

of

("Kanzig Decl")

dated Sept.

Plaintiffs'

is

13,

2011

acknowledges

~

i

14

that

under the traditional Swiss legal doctrine's conception of
a

"party,

by

the

11

"Absent Class Members would not

U.S.

duplicative

class

action

litigation

in

judgment

and

Switzerland.

1/

be bound
could

initiate

(Kanzig

Decl.

~

22. )
Therefore,

the

Court

concludes

that

Plaintiffs

have

not sufficiently demonstrated that Swiss courts would more
likely

than

not

recognize,

enforce,

effect to any judgment in
involving absent

Swiss

would expose Defendants

give

preclus

s case rendered by this Court

class
to

and

members.

the possibili

26

Finding

otherwise

that

they may

have

to

Swiss

relitigate

court.

the

same

Accordingly,

or

the

similar

Court

issues

before

a

not

certify

a

will

class which includes absent Swiss class members.
4: France and

d.

Before
preclusive

court

French

a

the French court will analyze the foreign

judgment

under

the

8,

Munzer

framework

which

was

242

F.R.D.

2011'

summarized

as

primarily

issued
at

jurisdictions

(the
the

of

international
(3)

the

set

France's

(Declo

the

policy

action before

val

foreign

French

rules

the

law

court
on

not
"Publ

foreign

may

(2 )

contrary

court was

in
for

242

F.R.D. at 96.

Luxembourg

(Mourre Decl. "

and

be
have
of
the
to

not

the
See

According to Plaintiffs, courts

"substantial

recognition

the

Prong");

result of forum shopping (the "Forum Shopping Prong/l).
Vivendi,

dated

conflict

Policy

v.
See

must

Prong") ;

court
(the

court.

The portion of

"Jurisdictional

public

Munzer

of Alexis Mourre,

(1)

foreign

in

highest

currently

to

in

forth

is

follows:
pursuant

and

96;

which

jurisdiction

judgment

by

rendered

("Mourre Declo/I).)

12

framework

judgment

give

court,

Feb.

a

and

foreign

Vivendi,

to

recognize

a

Munzer,

effect

will

follow

enforcement

18, 87.)

-27

of

the

French

foreign

approach"
judgments.

This
likely

Court

not

held

previous

enforce

a

foreign

that

French

courts
opt-out

judgment

would
class

action because to do so would violate French constitutional
s

princ

Recent

286 87.

See Alstom,

and public policy.
developments

have

253

only served to

at

confirm

For example in an amicus curiae brief in

this conclusion.
Morrison v.
S.Ct.

(2010),

U.S.

Nat' 1 Australia Bank Ltd.,

2869

F.R.D.

the

Republic

of

France

130

stated

that

"French courts would almost certainly refuse to enforce a
court judgment in a U.S.

'opt-out'

class action because

violates French constitutional principles and publ
policy"

and

approvingly

Alstom.

(See Mourre Decl.

Therefore,

the

cited
~~

Court

this

Court's

decision

16 -17 . )

concludes

that

Plaintiffs

have

not sufficiently demonstrated that French or Luxembourgish
courts would more
give

preclusive

rendered

by

likely than not recognize,
effect

this

to

Court

any

judgment

involving

residing in France or Luxembourg.

enforce,
in

absent

this

class

and
case

members

Finding otherwise would

expose Defendants to the possibility that they may have to
relitigate

the

France

Luxembourg.

or

certify a

same

or

class which

similar

issues

Accordingly,
includes

France or Luxembourg.

28­

before

the

absent

Court

class

courts

in

will

not

members

from

e.

Group 5: Spain

The United States and Spain do not have a bilateral
treaty regarding the recognition and enforcement of foreign
judgments.

(Decl.

Ballesteros,

dated

Ballesteros Decl. n

if

Fernando

met:

the
(1)

courts
country

Gascon,

Spanish

will

"system

of

the

defendant's
contrary

to

due
the

a

foreign

similar

Spanish

~

Decl.
28,

2011

recognizes

(2)

foreign

32;
~

foreign

conditions u

pursuant to an action
rendered in absent

( "Fernandez-

recognize

Feb.

the judgment is final;
(3 )

Fernandez

31

recognizes

dated

law also

following

jurisdiction;

Angel

2012

(Fernandez Ballesteros

Dec I. ") . )
where

Miguel

Under the Spanish legal principle of

).)

that

judgments.
Prof.

Prof.

Jan.

Spanish

reciprocity,
judgment

of

Decl.

of

19 ("Gascon
judgments

criteria

are

the foreign court had

judgment
(4)

was

rendered

the judgment was not

of the defendant and did not violate

process

rights i

the

policy

publ

(5)

decision

of

Spaini

and

is
(6)

not
the

decision is "authentic,1/ meaning that it complies with all
requirements of the foreign state,
with

any

Decl.

4J

prior
35;

Spanish

and is not in conflict

judgment.

Gascon Decl.

4J4J

36-38.)

dispute that any judgment here would I
these criteria;

however

I

(Fernandez Ballesteros
The parties do not
ly satisfy most of

they do offer different opinions

29

as to whether recognizing an opt-out class action judgment
would violate Spanish public policy.
In certain situations, Spanish law provides for "group
actions"

in

which

multiple

plaintiffs

bring

a

~~

4749.)

action

group

status

as

if

joinder"

individual

i

or users; or
legally
bring

(3)

subsequent

(1)

are

actions

(Fernandez­

was

maintain

similar

to

first

consumers

claims as part of a
Id. )

lity

The

enacted

in

and

2000

broadened in 2002 to include injunct

to enjoin harmful conduct,
discrimination

claims.

Gasc6n,

Apr.

dated

and in 2007
(Reply

24,

Decl.
~~r

2012

their

"permissive

similarly situated

association.

their

plaintiffs may

plaintiffs

plaintiffs bring the

constituted

group

Specifically,

claimants

plaintiffs

(2)

assert

a single action.

individual claims together
steros Decl.

can

to
of

to
was

relief

include gender
Prof.

Fernando

14-16

("Gasc6n

Reply

of

Proposed

Class

Dec 1. ") . )
Defendants
would not

fall

types

group

of

absence

of

a

argue

that

members

within one of
actions
United

these

under

the

explicitly enumerated

Spanish

States style

mechanism in spain is evidence that

law

opt-out
the

and

that

class

the

action

recognition of a

judgment in this case would violate material Spanish public
policy.

However,

Defendants

-30

1 to identify an expl

it

conflict

with

recognition of

Spanish
the

judgment.

law does not explic

policy

public

that

The mere

ly embrace a

fact

would

bar

that Spanish

foreign legal mechanism

does not mean that it would find the judgment so repugnant
that it would reject it as violating Spanish public policy.
In

fact,

under

Spanish

law,

certain

situations

exist

in

which collective action to enj oin clauses in contracts of
may be brought without the opportunity to opt out

adhes

(Gasc6n Reply Decl.

in the first place.

is inevitable that the
vehicle

used

to

between

countries,

~~

7 8,

It

33.)

ise contours of the procedural

vindicate

certain

however,

these

rights

will

differences

differ

do

not

by

definition constitute a conflict of material public policy.
Holding otherwise would allow the exception to swallow the
of comity and general recognition propounded in many
fore

jurisdictions,

backdrop of

luding

fundamental

Based

on

this

acceptance of group actions under

Spanish law and the expl
collect

Spain.

it adoption of binding injunct

actions in limited situations,

the Court is not

persuaded that the recognition of an opt-out class action
judgment would violate material Spanish public pOlicy.
Defendants
judgment
public

policy

this
due

also
case
to

argue

that

would

violate

(1)

the

-31­

recognition
Spanish

inability

of

of

the

procedural

absent

class

members

to

judgment

intervene

on

opportunity
the

absent
to

Spanish

and

1

{2}

class

the

members

not

However

participate.

collective

binding effect

action

afforded
the

1

of

legal

a

the
full

intricacies

system

appear

of
to

demonstrate an attempt to balance the interests of finality
with

the

markedly
tern.
part

s,

rights

of

similar

individual

to

that

of

litigants

the

United

in

a

States

manner
judic

For example,

in collective actions involving known

potentially

interested

parties

and have the right to intervene.
potentially interested part

s

must

However,

be

notified

these notified,

will be barred from active

participation if they fail to intervene prior to the filing
of

the

complaint.

{Gasc6n Reply

United States judic

~~

Decl.

The

38-39.}

system provides a similar mechanism

by which individual plaintiffs may participate:
independent

materials

appointment

of

either

prior

lead plaintiff.

to

or

Moreover,

by filing

following
a

plaintiff

the
in

the United States always has the opportunity to opt out of
the

litigation,

and

absent

class

members

may

objection to settlements at a fairness hearing safeguards

and

rights

Spanish system.
some

cases

Spanish

Id.

where

courts

do

not
~~

necessarily

51-52

the

interests

not

require

32­

at

any

additional

present

Gasc6n Decl.

i

stake

notice

voice

~

are

in

the

95.}

In

diffuse,

whatsoever

and

interested parties that fail to intervene during a certain
specified waiting period will nevertheless be bound by the
(Id. ~ 41.)

eventual judgment.
These
procedural

situations

persuasively

policy does

publ

not

suggest
always

that

mandate

Spanish
that

an

interested party be required to intervene or opt out at all
points

during

Instead,

litigation.

types

certain

active

collective

of

these individual participation rights

are balanced against other competing interests in much the
same way as the United States class action system provides.
Therefore,
United

the

States

Court

concludes

opt out

that

class

the

action

recognition of

judgment

would

a

not

violate Spanish procedural public policy.
In

the

demonstrated
not

instant

matter,

that

Spanish court

recognize,

judgment

in

Accordingly,

a

enforce,
this

Plaintiffs

and

action

give

have

sufficiently

would more

likely

preclusive

rendered

by

effect
this

than
to

a

Court.

the Court will certify a class which includes

class members from Spain with claims against Defendants.
Latin America

f.

The Proposed Class includes members from certain Latin
American

countries,

Uruguay,

Brazil,

Salvador,

Peru,

Chile,

specifical
Venezuela,

Dominican

Panama,
Argentina,

Republic,

-33­

Mexico

Colombia,
Ecuador,

and

El

Bolivia,

that the Court will consider collectively for the purposes
of this analysis

(the "relevant Latin American countries").

(Boruchow

Decl.

Ex.

American

countries,
look

signatories,

the

the

relevant

are

in

the

Convention

on

embodied

principles

Inter-American

and

Latin

they

whether

of

regardless
to

Code

Bustamante

Generally,

2.)

Extraterritorial Validity of Foreign Judgments and Arbitral
Awards

(the

whether

to

Prof.

recognize

a

the

are

Convention's

determine

judgment.

(See

Decl.

2011

~~

dated Mar.

not

Convention

binding

principles

characteristic of

and

here,

reflect

current

determining
judgments
1

the
are:

the

of

20-21

not a party
therefore

its

Inter-American

general

the

framework

the approach Latin American courts

take

~

25.)

to recognition of foreign judgments.
Under the

I,

While the United States

Inter-American

provisions

to

ign

Michael Wallace Gordon,

("Gordon Decl.").)
to

Convention")

"Inter-American

circumstances,
lihood

1
(1 )

the essential

of

whether

(Gordon Decl.

recognition
adequate

igation was provided to potent

issues
of

notice

for

foreign
of

ly interested part

the
s,

luding whether the parties had an opportunity to present
their

claims

and

defenses,

and

whether

subpoena were issued in a substant
that

provided

for

in

the

procedures

-34

the

summons

or

ly similar fashion to
of

the

jurisdiction

where

the

judgment will

judgment

is

manifestly
(See

policy.

Gordon

convention arts. 2(e),

considering

the

effect,

contrary

(2)

the

whether the

state's

public

Inter-American

23-24;

(h).)

the

parties'

and

to

Decl.

(f),

examining

After

take

arguments

and

declarations

expert

concerning

the

law of

the relevant Latin American countries,

the Court concludes

that, under the present circumstances,

Plaintiffs have made

a

sufficient

relevant

showing

sumptive

Latin American

that

countries

in

would more

1

the

ly

courts

than

not recognize a class-action judgment rendered in this case
by this Court.
have not
States

While the majority of Latin
ifically addressed the

class-action

general

policy

inclines

to

favor

United States
the unlike

of

judgments,
the

relevant

granting

courts.

the

countries
united

Court

Latin

The Court also

finds

American
to

that

countries

judgments

takes

the

of

into account

ability of plaintiffs from the relevant Latin

home countries,
of

enforcement of United

recognition

American countries to bring a

Court

can courts

any

and the absence

authority

expressly
States

duplicative action in their

from

stating

opt-out

in the

the
that

class

record before

relevant
the
action

the

Latin American

enforcement
judgment

of

a

would

manifestly violate the public policy of any of the relevant

35­

Latin

American

more

likely

These

countries.

than

not

considerations
courts

that

of

make

the

it

various

jurisdictions would recognize, enforce, and give preclusive

Accordingly,

29,100.)
which

includes

class

the

Court

members

~~

(See Gordon Decl.

s action.

effect to a judgment in

will

from

certify

class

relevant

the

a

Latin

American countries.
g.
Generally,

law

Be

recognition of

United States

Pierre

&

provides

Fierens

enumerated

States.
that

~

(I)

12.)

infringe
process.

the

(Id.;

Frederic

would refuse

public

upon

by

automat
of

25,

2011

Feb.
in

a

Jean~

11

number

courts

must

courts

in

of

refuse

to

the

United

In the instant case, Defendants argue

recognition

Belgian

Belgian

the
(Decl.

However,

rendered

Belgian courts

because
with

judgments
Id.

dated

Decl.").)

circumstances,

recognize

judgments.

Bart Volders,

("Fierens-Volders

for

would

to

be

policy,

Decl.

of Prof.

dated

Nov.

manifestly

and

requirements

recognize

(2)

a

jUdgment

incompatible

recognition

of

would

and

due

Dr.

Hakim Boularbah and Dr.

28,

2011

~~

7,

8,

48,

49

provide

an

("Boularbah Georges Decl.").)
Al though

Belgian

law

does

opt out class action procedure,

-36­

not

currently

it does recognize a number

of

different

VoIders

~

Decl.

19.}

litigation mechanisms.

{Fierens

The

collective

has

Belgian

legislature

also

explored expanding the availability of class actions under
Belgian

law,

including
~

(Fierens-Volders Decl.

21;

Such developments

13-14.)
policy
other

opt in

that

inclines

European

finding of
United

to

Union

and

are

consistent

favor

member

opt-out

class

states,

class

Against

as

the

absence

of

a

holding

that

backdrop,

showing of
the

actions.

which

recognition

of

~~

general

procedures

by
the

Instance

procedures

are

that
not

the European Code of
~~

1S

any cont

a

reflected

First

action

(Fierens-Volders Decl.
this

with

action

incompatible with the requirements of
Human Rights.

class

Fierens-Volders Reply Decl.

the Amsterdam Court of

States

opt out

22-23, 27.)
complemented

by

the

ling Belgian authority
an

opt-out

c

s

action

judgment would manifestly violate Belgian public policy or
infringe

on

the

Belgian requirements

due process,

Plaintiffs have made a

showing

a

that

recognize a
this

Court.

Belgian

a

trial

and

sufficient presumptive

would

more

likely

than

not

class action judgment rendered in this case by
After

examining

considering the parties'
the

court

of

Court concludes

than not recognize,

the

arguments

expert

declarations

concerning Belgian law,

that Belgian courts would more
enforce,

and

likely

and give preclusive effect to

37­

any

rendered

judgment

in

action

this

will

certify a

class

which

Court

this

Accordingly,

involving absent Belgian class members.

Court

by

includes

members

s

c

the

from Belgium with claims against Defendants.
8: Other Jurisdictions

i.

"Although plaintiffs often submit expert declarations
regarding issues of foreign law,
necessary

plaintiffs

for

such declarations are not
carry

to

ts of foreign law."

establishing

burden

the
Alstom,

253

of

F.R.D.

The Court finds

at 291 (citing Fed. R. Civ. P. 44.1).

Plaintiffs have met their burden of establishing that the
courts

of

countries

that

Community or signatories
exception
more

of

France,

likely

than

are

members

the

European

to the Lugano Treaty -

with the

Luxembourg,
not

and

recognize,

of

tzerland
enforce,

and

will
give

preclusive effect to any judgment rendered in this action
by this

Court

Declo

~

class

which

Greece,

involving absent class members.

73(4).)

Accordingly,

includes

Mal ta,

class

Denmark,

the

members

Norway,

Court
from

Sweden,

(See Smit

will
Italy,
and

certify

a

Portugal,

Finland with

claims against Defendants.
However,
suffic
inclinat

the Court finds that the Plaintiffs have not

ly demonstrated that the stated policy or general
of

the

law

of

the

-38­

following

countries

would

more

likely

than

not

favor

recognizing,

enforcing,

and

giving preclusive effect to any judgment rendered in this
action

by

Israel,

Marino,

echtenstein,
Qatar,

Therefore,

absent

Korea,

Court

will

class

members:

Picairn,

Tokelau,

Japan, Oman,

Arabia,

not

Taiwan,

Bosnia,

Germany,

"Additional

the

the

Saudi

Monaco,

Namibia,

(collectively,

North

Korea,

China,

Emirates,

involving

Court

Kuwait,

Mongolia,
Arab

s

9

Andorra,

Countries") .

Excluded
certi

San

Africa

South

and

United

a

class

which

includes absent class members from the Additional Excluded
countries.
III. ORDER
For the reasons discussed above, it is hereby:
ORDERED

plaintiffs

that
AXA

the

motion

Private

(Docket

Management,

No.

776)

Pacific

Medical Center Employees Retirement Trust,

of

West

lead
Health

Harel Insurance

Company Ltd., Martin and Shirley Bach Family Trust, Natal
Hatgis,

Securities

Bypass

Trust,

and

& Investment

St.

Company

Stephen's

Bahrain,

School

for

Dawson
class

Although Germany is a member of the European Union and signatory to
the Lugano Convention, other courts in this District have determined
that it is not more likely than not that German courts would enforce a
class action judgment.
See Vivendi, 242 F.R.D. at 103 05; Borochoff v
_ . c -...._ _ _...~....._i_n_e ____._...
_
246 F. R. D. 201 (S. D. N. Y. 2007).
The Court is
persuaded by the findings and reasoning in those cases and will apply
them here.

39

certification pursuant

to

Federal

Rule

of

Civil

Procedure

23 is GRANTED as modified herein.

SO ORDERED.
Dated: New York, New York
22 February 2013

A'
.....

~

,,/~/~.~

~~~-.-~
VICTOR MARRERO

U.S.D.J.

-40